Thursday, May 28, 2015

Appalachian Power president defends rate increase

Even with this week’s approved rate
increases for customers of Appalachian Power and Wheeling Power, one company
executive maintains thousands of West Virginians
are still getting good prices for electricity.

“Before people rush to judgment about how the
company is run or what we do or think that they can do it better, they really
(need to) look at the underlying costs of providing electricity because this is
no longer a declining cost business,” said Charles Patton, Appalachian Power’s
president and chief operating officer.

The initial hike, set to take
effect immediately, will be 11.8 percent. Once fully implemented, the increases
will add up to $19.50 more each month for average customers.

Such costs are paid in a largely
rural state that, Patton said, poses unique problems for the power system.

The company’s original proposal was
for an additional $226 million.

The $123 million rate increase the
state Public Service Commission approved Tuesday for both Appalachian Power and
Wheeling Power included $79 million in base rate increases for infrastructure
improvements throughout the system along with $44.5 million in surcharges to
fund a new vegetation management program.

There are different increase
percentages for customer classifications, meaning commercial and industrial
customers will not see hikes as high as 16.1 percent.

Appalachian Power last saw a rate
increase in 2011, prior to the devastating storms of 2012 in the forms of the
June derecho and October’s Superstorm Sandy.

Together, Wheeling Power and Appalachian Power, both American
Electric Power subsidiaries, serve 24 West
Virginia counties.